Pakistan needs to choose its friends carefully. Currently it is committed to finalising a free trade agreement (FTA) with the Gulf Cooperation Council in an effort to increase trade between ourselves and the GCC member states. The GCC is in some disarray as a result of the internal dispute between some member states and Qatar which has stopped short of military conflict but which has soured relationships and increased tensions far beyond the area it covers. There is to be a third round of negotiations after the conclusion of a ministerial level meeting between the GCC countries that is presided over by Bahrain, and the commerce ministers of the GCC will meet again at the end of August with the FTA between Pakistan and the GCC high on the agenda.
The GCC is committed to moving away from economies that are oil-based and all are heavily dependent on importing agricultural products that they cannot produce for themselves. This works to the favour of Pakistan which has a comparative advantage in respect of meat, most fruits and another staple — rice. All are products we produce in volume and have the capacity to expand production. The GCC states are committed to liberalising and promoting bilateral trade and agro-processing plants are expected to be developed in Pakistan following the trade agreement.
All this is positive, but there are a number of flies in the ointment. The aforementioned internal GCC dispute involving Qatar is one of them, another is the essentially neutral position that Pakistan has maintained regarding relations with the Kingdom of Saudi Arabia. There is also the matter of just how stable GCC regimes are given that they are all monarchies, and that oil revenues are dropping globally as oil loses value and the world generally veers in the direction of greener fuel solutions that do not include oil. This is going to quicken over time and despite massive reserves the Gulf States and the GCC that sits on much of those reserves is going to become an increasing irrelevance. Trade by all means. Just let us be careful who with.
Published in The Express Tribune, August 6th, 2017.